Zombification in Poland in particular during COVID-19 pandemic and low interest rates

Marian Nehrebecki
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Marian Nehrebecki: University of Warsaw, Faculty of Economic Sciences

Bank i Kredyt, 2023, vol. 54, issue 2, 153-190

Abstract: This article addresses the issue of corporate zombification in the case of listed companies in Poland. The purpose of this paper is to analyse financially vulnerable zombie firms from the listed non-financial companies in Poland, in particular, during the COVID-19 pandemic and the period of low interest rates. Data from 2000 to 2021 from the EMIS database on the financial statements of companies registered on the Warsaw Stock Exchange and NewConnect were used. In the process of research, such methods as local linear projection regression, logistic regression combined with the scoring methods were used. The results of the research show that the economic crisis caused by the coronavirus pandemic and the period of low interest rates have increased zombie firms among the listed companies in Poland. The anatomy of zombie firms differs significantly from the anatomy of non-zombie companies. The dynamics of financial indicators of zombie companies that appeared during the recession (Global Financial Crisis, the COVID-19 pandemic) and the period of low interest rates as in the period without a recession, show the ambiguity of the financial condition of these enterprises. For the survival of zombie companies, the most important indicator is their size. The continued existence of zombie firms also depends on leverage and profitability as the main financial indicators.

Keywords: corporate zombies; bankruptcy; COVID-19; local linear projection regressions; scoring approach (search for similar items in EconPapers)
JEL-codes: D22 D24 E43 G33 (search for similar items in EconPapers)
Date: 2023
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